Saturday, September 13, 2008

The Rudd Government's claim that it must wait for a review before raising the age pension has been undermined by the revelation it considered a detailed submission on the question before the May budget.

Documents released to the Seven Network under the Freedom of Information Act reveal cabinet considered an 83-page submission, including detailed options, on increasing payments to age pensioners on March 25.

But it decided to take no action other than continuing the annual $500 pension bonus and raising the utilities allowance.

"It is now clear Mr Rudd's committee on pensions is just a cynical smokescreen hiding his deliberate refusal to help Australia's pensioners," said Opposition Leader Brendan Nelson.

Treasurer Wayne Swan yesterday maintained that he needed a full report before considering Dr Nelson's proposal for an immediate rise in the single age pension of $30 a week.

"We want to have a comprehensive look at all of the issues that arise when you increase a base rate of pension, and to make sure we do it in a comprehensive way," Mr Swan told Brisbane radio...
"The pensions review will report at latest by February so we can take action in next year's budget."

That review is being conducted by the head of the Department of Families, Housing, Community Services and Indigenous Affairs, Jeff Harmer.

The documents released to the Seven Network reveal that it was Dr Harmer's department that prepared the cabinet submission in March, suggesting the department has already examined the options the Treasurer is asking its head to examine.

Among the changes it considered was altering the way in which age pensions are benchmarked to male total average weekly earnings.

At the moment they are increased each March and September in accordance with movements in earnings to the previous November and May. The department considered adjusting the pensions in accordance with the forecasts of future movements in earnings.

The FoI documents reveal the Treasury opposed the idea, saying it would mean indexing the pension to a figure that was not independently sourced.

Prime Minister Kevin Rudd first wrote to Mr Swan about increasing the age pension on March 12, a few days after media reports raised the possibility the $500 pension bonus paid by the previous government would not be continued by Labor.

A series of emails between the Treasury and the Department of Families and Community Services followed, ending in a cabinet submission on March 25 and a briefing for the Treasurer on April 16.

Most of the options considered by the departments were blacked out in the documents released under the Freedom of Information Act.

During the past week, ministers including the Prime Minister, the Treasurer and the Deputy Prime Minister have conceded they would be unable to live on the single age pension of $273 a week.

The documents suggest that they have had options before them for increasing the age pension for six months.